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FKI recommends £478m takeover offer

22 April, 2008

The Loughborough-based engineering group FKI is recommending a takeover bid from the turn-around specialist Melrose that values the group at £478m. The deal comes less than a year after FKI is reported to have rejected an offer from the private equity firm, the Backstone Group, which would have valued FKI at a £764m.

FKI says that the new deal provides FKI shareholders with "an attractive opportunity" with the prospects for an enlarged business. Sir Michael Hodgkinson, a senior independent director at FKI says that the offer will also resolve FKI’s funding problems. "The alternative would have been to push ahead with a refinancing of the group which, in the current climate, may have taken two to three years to complete," he points out.

FKI’s portfolio ranges from the manufacturing of wire rope and door-fittings to the FKI Logistex materials-handling business, which FKI is planning to sell. The group employs 12,000 people in 20 countries.

One of FKI’s four divisions, energy technology, specialises in rotating machines, switchgear, rail traction equipment, and transformers. The division, which had a turnover of £344m last year, includes the Brush businesses based in Loughborough, and MarelliMotori which produces low- and medium-voltage motors and generators in northern Italy. FKI previously owned the Norwich-based motor manufacturer Laurence Scott & Electromotors, but sold the business in 2005.

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